Lenovo’s plan to lay off 5 percent of its workforce saves money in the short run, but could eventually end up hurting the Chinese PC maker as it seeks to become a global market leader, a business and technology research firm in China said Monday.

Analysys International, a research firm in Beijing, said Lenovo will likely reduce manufacturing costs and streamline its supply chain after the computer maker sheds about 1,000 jobs and integrates its global sales and back-office support.

Beijing

Lenovo said the changes, to be completed in the next six to 12 months, will save it $250 million annually. But researchers said in a report that the plan to centralize manufacturing could result in higher costs for global shipments.

“It is very likely the distribution channel and terminal retail sales costs will rise sharply,” said the Analysys International report. “Lenovo must pay attention to its global cost control.”

Costs to ship internationally are very important to Lenovo, which has made no secret of wanting to tackle global PC giants like Dell head on.

Dell

Lenovo last month unveiled a new line of self-branded computers aimed at the United States and other Western markets (see Lenovo PCs Shedding IBM Skin).

Lenovo PCs Shedding IBM Skin

The move was significant since the company until then had relied on sales of IBM’s ThinkPads, which it acquired in 2005 after purchasing IBM’s PC division, to promote its name in the Americas (see Lenovo-IBM Deal Finalized).

Lenovo-IBM Deal Finalized

Preparing to Go Public?

To be sure, Lenovo is doing the kind of cost-reduction restructuring common to most international-level companies—moves that appeal to current or would-be investors.

“We want Lenovo to deliver profitable, sustainable growth everywhere we do business,” said Lenovo president and CEO William J. “Bill” Amelio. He said the plan will allow the company to focus on innovation, improve customer relations, and “deliver a cost structure that better reflects the realities of today’s highly competitive, global PC industry.”

Cost-cutting and profit-increasing measures would certainly help Lenovo should it decide to go public on the U.S. market (see Lenovo May Go Public in U.S.).

Lenovo May Go Public in U.S.

As part of the plan, which will affect about 1,000 of Lenovo’s 21,400 workers worldwide, the company’s sales, service, and support will be integrated for the Americas, Asia/Pacific, and Europe/Middle East/Africa (EMEA), rather than having separate divisions for each region.

The global supply chain will move closer to manufacturing and suppliers. The company will also move its North American corporate office from Purchase, New York, to Raleigh, North Carolina, in order to be closer to its international R&D division.

Raleigh, North Carolina

But Analysys International noted that Lenovo’s focus on global strength is indicative of what all Chinese electronics makers face.

“As China’s economy further opens up, [the] Chinese electronics manufacturing industry faces pressure from international players both at home and abroad,” said the research firm. “The market has higher demand for cost control and supply chain flexibility.”